Checklist: Prep for a Successful Coding Audit

Accurate and efficient medical coding is crucial to a healthcare provider’s ability to optimize reimbursement and meet compliance requirements. All hospitals and healthcare organizations should maintain a robust coding quality compliance plan with periodic coding audits while providing education opportunities to staff members that will strengthen coding processes. These coding audits are vital to assessing healthcare data quality, coding compliance & documentation, and identifying areas of risk while providing actionable recommendations for improvement.


There are many components to consider to better prepare your healthcare organization and ensure that a successful medical coding audit will take place. A lack of proper planning can result in reimbursement discrepancies, increased compliance risks and less than optimal financial performance within your revenue cycle.


Determine the frequency of medical coding audits

Identify the frequency for coding audits: daily pre-bill, monthly, quarterly, semi-annual, or annual. Alternating random and targeted chart selection for each quarterly review allows hospitals and healthcare providers to compare auditing results from year to year within each quarter and achieve a well-rounded coding compliance program.


Consider the scope

Will the scope of your health care organization’s upcoming coding audit include inpatient, outpatient, professional fee, or a combination?


  • Total data quality (validation of all codes) or DRG validation only?
  • MS-DRG and/or APR-DRG?


  • Which outpatient service types are to be included? Emergency department, same day surgery, endoscopy, observation, wound care, ancillary/diagnostics, recurring such as physical therapy, occupational therapy, chemotherapy, blood transfusions, interventional radiology, clinics, etc.
  • Will the review include only HIM coding or also Charge Description Master (CDM)-assigned CPT codes?
  • Will the review include validation of injection and infusion services?
  • Will the review include validation of facility-reported E/M levels?
  • Will medical necessity for tests performed and services rendered against Local Coverage Determination (LCD) and National Coverage Determination (NCD) be included?

Professional Fee

  • Which specialties are to be included?
  • Which providers are to be included?
  • Will medical necessity for tests performed and services rendered against LCD and NCD be included?


Determine the volumes for review

Considerations can include specific volume per DRG, per coder, per coder per service type coded (for cross-trained coders). Etc.


Choose a chart selection method

Random, random from top MS-DRGs or SPR-DRGs, targeted by MS-DRG or APR-DRG or specific code, targeting of specific records.


Determine if the review will be concurrent or retrospective


Decide which payors are to be included

Will your hospital or healthcare organization include all payors or specific payor types, such as Medicare only


Decide which dates of service are to be included

Is it important to include the most recent dates of service, or dates of service from a specific quarter (Jan-Mar/Apr-June/July-Sept/Oct-Dec), etc.?


Decide where the audit will be performed

Is there a preference or advantage for considering remote vs. on-site?


Plan time for the review

Avoid scheduling coding audits during peak vacation times; ensure that your medical coding staff has adequate time set aside to participate in the coding audit process for reviewing the recommendations and responding to the auditor


A trusted and proven revenue cycle vendor partner can go a long way in assisting your hospital or healthcare organization develop the best medical coding audit compliance plans based on your specific needs.


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